Manufacturing in U.S. Expands by Most in Six Months

Manufacturing figures from around the world today showed the industry is surviving the strains from Europe's sovereign debt crisis.

U.S. factories expanded in December at the fastest pace in six months, adding to evidence manufacturing is improving from India to the U.K. entering 2012.

Institute for Supply Management's factory index climbed to 53.9 last month from 52.7 in November. Fifty is the dividing line between growth and contraction, and economists surveyed forecast the gauge would rise to 53.5.

Data showed factory orders and production grew at the strongest rates in eight months while inventories were cut. Combined with another report showing construction spending climbed in November, the figures indicate the world's largest economy accelerated in the final months of 2011.

''Global economic activity is showing signs of life,'' said Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp. ''Manufacturing in the early part of the year will keep expanding. It's good to know that purchasing managers are feeling a bit better about the economic backdrop.''

Estimates for the factory index from 74 economists ranged from 50 to 56. A reading above 42.5 generally indicates an expansion in the overall economy, the group has said.

- Courtesy of Bloomberg News